The Hungarian Communications Market Developments and ...

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Figure 1.1: NHH’s regulatory objectives
Consumer’s interests
Price, value, choice
Penetration/usage
In Hungary the only guarantee
of the realisation of consumer
interests is competition
Efficient competition
Competition is only
sustainable and efficient with
a developing and stable sector
Sector interests
Innovation
Investment
Financial
stability
Certain social objectives
(e.g. universal services) relating
to electronic communications
are ensured essentially not
by competition
The Authority has developed the target system underlying the
Regulatory Strategy in harmony with its existing mission 10 and vision.
The framework of such target system is provided by relevant
EU regulations and directives, international commitments and the
Hungarian legal environment, in particular Eht. and other relevant
acts and decrees.
The foremost direct objective is to establish effective competition,
that is a highly intensive competition between market players
in terms of both (access) infrastructure and retail services. In the
case of effective competition no market player, either alone or with
others, is able to significantly influence the dynamics of the market.
The protection of consumer interests is a further element of the
target system, embodied by affordable prices, high-value content of
products/services and a wide range of services on the market. The
third element of the target system is the cross-sector interest characterized
by three factors: innovation, investment and the degree of
financial stability.
The regulator’s ultimate goal is to protect consumer interests, yet its
primary indirect objective remains to be the development of effective
competition. If it comes to controversies between the realization of
individual objectives, it is competition that receives priority over the
rest of the objectives. The Authority, nevertheless, will consider and
compare the advantages and disadvantages of realizing one objective
over another one, along the principle of net usefulness. In the case of
sector-level interests, the Authority will also consider minimum levels
facilitating the sustainability of competition concerning the indices of
financial stability.
Regulatory principles
The principles concerning the application of regulatory instruments
have been formulated in accordance with the regulatory objectives
and various market development trends and scenarios. Besides the
objectives, it is the principles that guarantee permanence of the Strategy,
as the principles are not linked with specific directions of market
development, which thus have the potential to support the Authority’s
decisions irrespective of market development specificities.
The guiding principles mark out the most important principles of
intervention to be followed by the Authority along the three regulatory
objectives (effective competition, consumer interests, sectoral
interests).
Certain inputs in the electronic communications market indispensable
for the provision of services are only available to a limited
extent. Such bottlenecks distort and create barriers to the development
of competition, their presence thus makes ex ante market
regulation necessary. The Authority’s task here is twofold. First, the
Authority’s long-term goal is to eliminate bottlenecks. Second, as
long as these bottlenecks exist, the Authority must keep the “owners”
of such bottlenecks from abusing their dominance resulting
from them. In the short run, major bottlenecks are constituted by the
level of access infrastructure, primarily due to extremely high entry
barriers.
In the long run, the goal of the regulator’s activity is to contribute
to the development of sustainable, effective and “self-supporting”
competition in the telecommunications sector. The establishment of
“self-supporting” competition assumes that the bottlenecks of competition
cease to exist or gradually lose their significance. Should this
be the case, the use of sector-specific regulatory instruments may
be replaced by the promotion of self-regulation of the market and
the use of ex post instruments. In some cases, however, a certain